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Now that you’ve tracked your family’s spending, you can analyze your findings. If you don’t like what you see, you now have an opportunity to change things.
First, look at your fixed expenses -- the expenses that stay the same each month. Some will be hard to cut back on (mortgage, auto loans, etc.), but other fixed expenses such as cable, gym fees, lawn services, etc. may be easier to trim. Which monthly memberships can be eliminated? Is your cable/phone/internet package the right one for you? Could you get by with a less expensive version? Can you drop your landline altogether? Can you do-it-yourself?
Your variable expenses are often the easiest to cut back on. These are the categories that fluctuate each month such as groceries, clothing, gas, eating out, etc. Visit our Money Saving Tips forums for creative solutions to saving money in each of these categories.
Often times families lose sight of the big picture because they’re distracted by more urgent, compelling ways to spend their money. Is your spending in line with your financial goals and your family’s values? Don’t let things like lunches out or a salon pedicure habit get in the way of funding your child’s college education. Realize that when you cut back in certain areas, you will be able to apply your savings towards more important things such as paying off debt, building savings, or achieving your dreams.
Assignment: Identify 3-5 key spending areas that you’d like to trim and come up with creative solutions to cut back.